Unemployment worrying

2018-06-06 06:01

The South African Institute of Race Relations (IRR) underlines the urgent need for policy reforms, especially in education, for the country to attract investment. This is expected to, in turn, lead to economic growth and reduced unemployment figures.

This research was done in a recent survey of the socio-economic state of South Africa.

According to Gabriela Mackay, IRR analyst, the data shows that, in a country in which only 21% of people with jobs have a tertiary education, sectors that have traditionally absorbed low and semi-skilled labour account for a decreasing contribution to employment. High-skills sectors are growing in dominance in contrast to the growing dominance of high-skills sectors.

“Most formally employed people in South Africa work in just three sectors – government, trade and finance – which each employ more than two million people. Together, these sectors account for some two thirds of people in formal employment,” said Mackay.

“The decreasing contribution of sectors that have traditionally absorbed low and semi-skilled labour worsens the problem of unemployment. This is because many of those looking to enter the job market do not have the requisite abilities to perform high-skilled professions. People without some form of tertiary education also find it harder to find employment.”

The findings in the survey reveals:

  • Government employment accounts for 2 042 759 jobs, or 21% of formal employment. This includes jobs in city councils, health commissions, para­statals and institutions of higher learning.
  • Trade contributes 2 097 092 jobs or 22% of formal employment.
  • Finance accounts for 2 173 830 jobs or 23% of formal employment.

“This trend was worrying, since other sectors such as mining, manufacturing, and construction — which collectively accounted for close to 40% of formal employment in 2001 – now account for only 23%,” Mackay said.

“The scale of the challenge is borne out of statistics showing that, by the official definition, South Africa has an unemployment rate of 27,7%. This means that over 6 million people are unemployed.

  • “This figure climbs to over 9 million, and a rate of 36,6%, if the expanded definition is used.”

Mackay added that South Africa was likely to continue facing high levels of unemployment if it could not find a way to both train and upskill jobseekers, while simultaneously promoting investment-driven growth.

  • “Reliance on the community, social, and personal services sector to create jobs is not a long-term solution, as this cannot be sustained amid increasing debt levels.

“Instead, better education and training, renewed investment and economic growth should be the means by which South Africa seeks to combat unemployment,” said Mackay.

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